In their reports to investors
Shutterstock has always emphasized their steadily growing
Revenue Per Download as well as their growth in the number of images offered to customers. But there is another figure that is extremely important to image creators. That is the
Revenue Per Image In The Collection (RPIIC). That has been steadily declining since Q2 2014.
Revenue Per Image In The Collection (RPIIC) is important to creators because they have costs in time and money to create the images they make available to Shutterstock for licensing. Those costs have not been declining. If anything they are increasing. The only thing that has been declining is the creators return on investment.
The following chart makes clear what has been happening since Q2 2011. For the three years from Q2 2011 to Q2 2014 the RPIIC was relatively stable and showed some slight growth. But then the number of downloads per quarter started to plateau.
| |
Q2/2011 |
Q3/2011 |
Q4/2011 |
Q1/2012 |
Q2/2012 |
Q3/2012 |
Q4/2012 |
Q1/2013 |
Q2/2013 |
Q3/2013 |
| Download |
14.4 |
14.8 |
16.2 |
17.6 |
18.3 |
18.7 |
21.4 |
22.3 |
24.3 |
25.4 |
| Rev per DL |
$2.01 |
$2.10 |
$2.14 |
$2.13 |
$2.22 |
$2.26 |
$2.30 |
$2.29 |
$2.33 |
$2.35 |
| |
|
|
|
|
|
|
|
|
|
|
| Images in collection |
15.3 |
16.2 |
17.4 |
18.8 |
20.2 |
21.7 |
23.3 |
25 |
28 |
31.3 |
| Total Rev |
28.94 |
31.08 |
34.67 |
37.49 |
40.63 |
42.26 |
49.22 |
51.5 |
56.8 |
56.8 |
| Rev/Image in collection |
$1.89 |
$1.92 |
$1.99 |
$1.99 |
$2.01 |
$1.95 |
$2.11 |
$1.98 |
$1.96 |
$1.81 |
| |
|
|
|
|
|
|
|
|
|
|
| |
Q4/2013 |
Q1/2014 |
Q2/2014 |
Q3/2014 |
Q4/2014 |
Q1/2015 |
Q2/2015 |
Q3/2015 |
Q4/2015 |
Q1/2016 |
| Downloads (millions) |
28 |
29.7 |
31.5 |
31.2 |
33.5 |
33.4 |
35.9 |
38.1 |
39.8 |
41.2 |
| Rev.per DL |
$2.43 |
$2.45 |
$2.52 |
$2.65 |
$2.68 |
$2.87 |
$2.85 |
$2.76 |
$2.86 |
$2.77 |
| |
|
|
|
|
|
|
|
|
|
|
| Images in collection |
32.2 |
35.4 |
38.8 |
42.7 |
46.8 |
51.6 |
57.2 |
63.7 |
71.4 |
81 |
| Total Rev. (millions) |
68 |
72.8 |
80.2 |
83.7 |
91.2 |
97.5 |
104.4 |
107.3 |
115.9 |
116.7 |
| Rev/Image in collection |
$2.10 |
$2.06 |
$2.07 |
$1.96 |
$1.95 |
$1.89 |
$1.83 |
$1.68 |
$1.62 |
$1.44 |
| |
|
|
|
|
|
|
|
|
|
|
| |
Q2/2016 |
Q3/2016 |
Q4/2016 |
Q1/2017 |
Q2/2017 |
Q3/2017 |
Q4/2017 |
Q1/2018 |
Q2/2018 |
Q3/2018 |
| Downloads (millions) |
43.4 |
41.2 |
41.1 |
43.5 |
42.7 |
41.9 |
43.9 |
43.7 |
45.2 |
43.9 |
| Avg Rev per DL |
$2.81 |
$2.91 |
$3.02 |
$2.96 |
$3.05 |
$3.23 |
$3.33 |
$3.40 |
$3.41 |
$3.40 |
| |
|
|
|
|
|
|
|
|
|
|
| Images/in collection |
92.1 |
102.7 |
116.2 |
132 |
144.7 |
155.8 |
170.1 |
196.8 |
215.1 |
233 |
| Total Rev. (millions) |
124.3 |
123.1 |
130.2 |
130.2 |
134 |
141.1 |
151.8 |
153 |
156.6 |
151.6 |
| Rev/Image in collection |
$1.34 |
$1.20 |
$1.12 |
$0.98 |
$0.93 |
$0.90 |
$0.89 |
$0.81 |
$0.73 |
$0.65 |
The managers at Shutterstock seemed to have determined that all they needed to do to grow revenue was get more images and find more customers. The number of images grew somewhat for the next year and a half, but the revenue didn’t grow nearly as fast. So in
December 2015 Shiutterstock decided that they had to make it much easier for new contributors to add images to the Shutterstock collection.
Prior to that, in order to be accepted as a contributor the image creator had to submit 10 images for review and have 7 accepted. Now, new contributors only had to have 1 out of 10 images accepted for the doors to be opened allowing them to submit virtually anything and everything they wanted. From then on there has been very little review or control over what is added to the collection.
At the time most of the existing contributors believed this move would lead to a lower and lower quality offering. Many reported that in the previous year the overall quality of the offering has been rapidly declining as Shutterstock raced to add more images. Experienced producers said that acceptance of their new submission was very erratic with almost everything accepted in one submission and almost everything rejected in the next. The reasons given for rejection often made little sense.
As we look at what has been happening in 2017 and 2018 it seems clear that the addition of new images has little or no effect on the total number of images downloaded.
Shutterstock may have already found virtually all the customers who are willing to pay for the images they use, or have any significant need for images. And most of these customers need about the same number of images this year as they used last year. Just because your giving the customer a lot more choice doesn’t mean they are going to buy more.
There may always be a few new customers popping up who need one or two images a year, but that’s not going to lead to significant growth.
Time For Change
It should also be noted that much of the growth in Revenue per Download since Q4 2015 has probably been due to the increasing sale of video at much higher prices than still images. Video represents a very small percent of total downloads, but the higher prices help the average when video downloads are counted together with still images as one number.
If we had a true breakdown of Revenue per Still Image DL and Revenue per Video DL, and the total revenue generated by each, the decline in RPIIC for still images would probably be much worse.
It seems clear that a strategy change is needed. That probably includes a somewhat higher price for the imagery in greatest demand and making it easier for customers to find high demand images. It may also require spending some money on editing and improving keywording.
But since all of these steps would be moves away from Shutterstock’s founding philosophy, it seems unlikely that anything will happen.